Dublin second hand house prices increased by 17.7% last year as a lack of property coming to the market and improved buyer sentiment lead to the 6th consecutive quarter of growth, according to the DNG Annual Property Review.
Cash buyers continued to dominate the market, accounting for around 54% of all sales in the first 9 months of 2013, but this dropped to 40% in September and October as an increased reliance on financial institutions to fund purchases started to appear. In contrast 30% of sales in the UK are reported as financed with cash.
Although house prices in the capital outpaced the rest of Ireland, growth was visible with a 21% increase in transactions outside of Dublin versus 15% in the greater city area between January and October 2013, with full year figures forecasted to be similar.
During 2013 Q3 (July-Sept) experienced the biggest jump in prices at 5.6% with the average price of a house in Dublin now standing at €302,846. Houses in West Dublin showed the biggest annual increase at 20.6% followed by south of the city at 17.5%, with north Dublin showing an increase of 16.6%. Houses above the €500,000 mark increased most in value at 18.7% narrowly beating houses in the €251,000 to €350,000 price range which increased at a rate of 18.6% during the year.
Commenting in the report Dermot O’Leary, Chief Economist, Goodbody Stockbrokers noted, “that the return of employment growth has been the most unambiguous sign that the economy is returning to health”, while from a housing market standpoint he added that “the return of full time jobs should make the uncertain buyer more likely to take the plunge”.
Commenting on the results Keith Lowe, CEO, DNG said: “It is very encouraging to see 18 straight months of price increases for residential property in the capital. This has been largely driven by an improvement in consumer sentiment and confidence in the property market both from within Ireland and externally from non-Irish investors investing in the market. National and international market commentators have also recognised this improvement in sentiment and economic fortunes or Ireland. It is also interesting to note that both house prices and rental values are both simultaneously rising in the Greater Dublin Area which is a sure sign that there is a shortage housing supply in the capital.”
Looking at 2014 Mr. Lowe expects a 15% increase in house prices in the greater Dublin area versus an average of 3-5% in a number of other key urban areas. A small number of areas will experience price deflation but overall a further 10% – 15% rise in tractions is expected in 2014 bringing the number to over 30,000 in the year ahead.
Full copy of the report is available on www.dng.ie